The Making of a Market Leader
Microsoft Word is the flagship product of the Office suite, and has been one of the cornerstones of Microsoft's success in both the home software and business sectors. The first versions were developed in 1981 under a different name, but the brand was born in 1983 when Microsoft produced the Multi-Word Tool for Xenix, a Microsoft-developed operating system based on UNIX.
New versions were soon developed for MS-DOS, Apple Macintosh and other major operating systems. However, it remained a relatively complex piece of software that could only be easily operated by text commands, which acted as a barrier to entry for the casual user. Word processing remained a highly technical skill, with basic formatting requiring that the user memorize dozens of key combinations and text inputs.
In 1989, the first graphical version of Microsoft Word was released for Windows 3.0, ushering in a new era of professional software. While the price was an eye-popping $500, and the performance left something to be desired, the relative ease of use of this new version - it could be understood intuitively - helped to establish Word as the market leader and industry standard. Corel WordPerfect, the other major word processing competitor, had a similar user interface and was also easy to understand - but they failed to release a Windows version before Word 2.0 was released in 1991. That error would prove fatal for Corel in the long run.
Word 97 acted as the codebase for subsequent versions up to Word 2000, and by that time, Microsoft had no significant competition in the Word processing field. Software is essentially a form of language - so it is not surprising that it has been so common in recent history to see one particular software product achieve almost complete market dominance. It's like English being the most commonly used language in the US - it simply provides more utility that everyone communicate using the same standard, even if there are various inefficiencies with the system.
Word remains the most popular word processor on the market for all common consumer operating systems, with the latest version being Word 2008. The most significant competition now comes from open source alternatives like Open Office, but the fact that Word itself cannot edit that file format limits the degree to which it is likely to expand into Word's market share.